Crains New York - December 3, 2012 - (Page 4)

Discover Gratitude. We thank you for having the conﬁdence in us to serve you in 2012 and we look forward to a long and prosperous relationship. Access Capital / Aegon USA Realty Advisors, LLC / AEW Capital Management / American Realty Capital / American Transit Insurance Company / AQR Capital Management / Baltoro Capital Management / Bowery Residents’ Committee / CIM Group / City Harvest / Coty Inc. / Denihan Hospitality Group / Empire Education Corporation / European Investors / Federation of Protestant Welfare Agencies / FiftyOne, Inc. / Fresh / International Alliance of Theatrical Stage Employees / ITOCHU International Inc. / Mitsui Fudosan America / Nonproﬁt Finance Fund / Northern Manhattan Improvement Corporation / Paradysz, Inc. / Portman Holdings / Professional Staff Congress / Random House / RICG / Somerset Management / Starwood Hotels and Resorts Worldwide, Inc. / The Jordan Company / UBS Realty Investors LLC / and many more IN THE MARKETS by Aaron Elstein Tax-fraud appeal burns feds again F Discover Excellence in Commercial Real Estate. Discover Cassidy Turley. Peter Hennessy President, New York Tri-State Region 212.318.9790 Peter.Hennessy@cassidyturley.com www.cassidyturley.com Tenant Representation / Project & Development Services / Project Leasing / Property Management / Corporate Services / Capital Markets ive years ago, a Brooklyn accountant named Martin Nissenbaum (right) was indicted and charged with trying to defraud the U.S. government by helping clients set up bogus tax shelters. But this was no ordinary accountant and no ordinary criminal case: Mr. Nissenbaum was the national director of the personal income-tax and retirement planning practice at Big Four accounting firm Ernst & Young. It’s largely forgotten now, but in the days before subprime mortgages and financial crises, the feds were cracking down hard on fraudulent tax shelters and the people who designed them. In 2005, accounting giant KPMG was forced to cough up a $456 million fine and struck a deal to avoid an indictment that surely would have put it out of business. Prominent law firms like Sidley Austin also paid hefty penalties. The tax-shelter cases were inherently complex, but they boiled down to an easily understood image of highly paid accountants and lawyers offering the nation’s wealthiest people their hush-hush advice on how to cheat Uncle Sam. “Prosecutors really wanted to get somebody,” recalled Nathan Lewin, a prominent defense lawyer in Washington, D.C., “and judges and juries were ready to accept what the government asserted.” Mr. Nissenbaum was the star defendant of these cases—or as much of a star as an accountant can be. His celebrity rested on being frequently quoted in The Wall Street Journal and helping to write such books as Ernst & Young’s Personal Financial Planning Guide. He fought the charges, but the government had email evidence that seemed to lay bare his role in designing the tax-avoidance schemes. In the eyes of jurors, it probably didn’t help that his team, known within the firm as Value Ideas Produce Extraordinary Results, called itself the VIPER group. Ernst & Young wasn’t Our bench has gotten deeper. We are pleased to announce the combination of two storied law firms with one vision of the future. Smith,Gambrell &Russell, llp Attorneys at Law Same Cost Effective Rates Same Timely Responsiveness More Great People More Experience and Knowledge charged, although in 2003 it had agreed to pay the Internal Revenue Service a $15 million penalty related to its shelters. After a 10-week trial in 2009, a jury convicted Mr. Nissenbaum. He was sentenced to 30 months in prison, fined $100,000 and ordered to perform 120 hours a year of community service after his incarceration. Last week, Mr. Nissenbaum received stunning news. By a 2-to-1 vote, the U.S. Court of Appeals threw out his conviction.The panel wrote that the crux of the government’s case against Mr. Nissenbaum—a single email—“is simply not enough” to warrant conviction. “The question is how do you get your reputation back, and he had a phenomenal one,” said Mr. Lewin, who represented the 56-year-old Mr. Nissenbaum before the appellate court. Nowadays, a lot of folks are understandably demanding indictments of the financial-world luminaries who led the economy into the abyss four years ago. It’s a mystery why no one from Lehman Brothers, for example, has been charged with fraud after a bankruptcy examiner showed how the ailing firm shoved dud assets off its books every quarter only to bring them back later. But if you want some insight into why prosecutors seem to be nervous about bringing criminal fraud cases against Wall Street grandees, the story of Mr. Nissenbaum may offer a cautionary hint. Atlanta | Jacksonville | New York | Stamford | Washington, D.C. | Frankfurt | www.sgrlaw.com | Follow us 16.5M NUMBER OF HITS on Google for the term “fiscal cliff.” That is 300,000 more than produced by a search for the word “Powerball.” 4 | Crain’s New York Business | December 3, 2012 newscom http://www.cassidyturley.com http://www.cassidyturley.com http://www.crainsnewyork.com http://www.sgrlaw.com http://www.sgrlaw.com

Table of Contents for the Digital Edition of Crains New York - December 3, 2012

Crains New York - December 3, 2012
In the Boroughs
In the Markets
The Insider
Business People
Opinion
Greg David
Report: Best Places to Work
Classifieds
For the Record
Small Business
Real Estate Deals
New York, New York
Source Lunch
Out and About
Snaps

Crains New York - December 3, 2012